Access to Improved Water Sources and Rural Productivity: Analytical Framework and Cross-country Evidence

In this paper we address the issue of access to drinking water in rural areas related to the productivity of the agricultural workforce. Considering an agricultural household model as our basic conceptual framework, we analyze the theoretical aspects of increasing the access rate to drinking water on the productivity of the agricultural workforce. First, we show that the increased access rate to drinking water is conducive to agricultural productivity due to increased intrinsic productivity of individuals and additional gain in time for agricultural production. Second, it comes out that the constraints on the access to drinking water may be costly costs in terms of decreased productivity and well-being of rural people. Moreover, the results of econometric estimates do not reject our theoretical implications. On a sample of 27 African countries, these results show mainly that access to clean water improves agricultural productivity. This positive effect is reinforced by the presence of a better sanitation system, even after controlling for country-specific effects and for the characteristics of rural areas. Nous abordons la question de l’accès à l’eau potable en milieu rural en relation avec la productivité de la main d’œuvre agricole. Sur la base du cadre d’analyse des ménages agricoles, nous analysons les aspects théoriques des effets d’un accroissement du taux d’accès à l’eau potable sur la productivité de la main d’œuvre agricole. En premier lieu, nous montrons qu'une augmentation du taux d'accès à l’eau potable est propice à la productivité agricole du fait de l'accroissement de la productivité intrinsèque des individus et du gain additionnel de temps pour la production agricole. D’autre part, il ressort que les contraintes d’accès à l’eau potable sont susceptibles d’imposer des coûts en termes de baisse de productivité et de bien-être aux populations rurales. En outre, les résultats économétriques ne rejettent pas ces arguments théoriques. Sur un échantillon de 27 pays africains, ces résultats montrent principalement que l’accès à l’eau potable améliore la productivité agricole. Cet effet favorable est renforcé par la présence d’un meilleur système d’assainissement, même après avoir contrôlé pour les effets spécifiques pays ainsi que pour les caractéristiques du milieu rural.(Full text in english)

Understanding the Causal Links between Financial Development and International Trade

This paper analyses the causal relationship between financial development and international trade using data of 21 developed and developing countries from 1961 to 2010 and appropriate time series techniques that allow us to decompose the source of causation according to the order of integration of the variables and the possible presence of a cointegrating relationship. We analyze in detail the issue of integration of our series in order to use the most appropriate stationarisation techniques on non-stationary series. We also account for the major problems encountered in empirical studies on issues of causality link between finance and the real economy. Our results provide little support to the view that financial development is a leading factor in the participation of countries in international trade. Mainly, we find a bi-directional relationship between the levels of finance and trade. Moreover, it appears that the causality pattern varies across countries with different levels of economic development. Overall, the development of the financial sector contributes more to the causal relationship in the developing countries than in the developed countries. These results are robust to the use of an alternative method of testing for causality and to the use of alternative indicators or financial development and international trade

Export Activity and Productivity: New Evidence from the Egyptian Manufacturing Industry

This study explores the relationship between exports and productivity using a panel dataset of Egyptian manufacturing firms. Most previous studies using data from more developed countries suggest that exporters are more productive than non-exporters because the more productive firms self-select into export markets, while exporting does not necessarily improve productivity. We investigate if exporting firms are more productive than non-exporting firms and, if so, whether the productivity differential is due to a self-selection process or to the role of learning from exporting. We also ask if the extent of export activities matters for productivity. We find that both labor productivity and total factor productivity are significantly higher for exporters than for non-exporters. On average, labor productivity and total factor productivity are, respectively, 46% and 63% higher for exporting firms than for domestically-oriented firms. When we differentiate between pre-entry and post-entry differences in productivity, it appears that this export premium is driven by a learning-by-exporting process rather than just a self-selection of more productive firms into exporting. This weak evidence for the selection hypothesis is a reflection of the importance of the level of development of destination countries. In contrast to exporters to OECD countries, exporters to Non-OECD countries self-select into export markets, signaling the importance of the technical assistance from foreign buyers benefiting the former exporters. We also find an inverted U-shaped relationship between export intensity and productivity, suggesting the existence of a "threshold of exporting". These results are robust to controlling for additional firm characteristics and potential outliers

The Effects of Financial Development on Trade Performance and the Role of Institutions

This paper aims to address the empirical question of whether a country's level of manufacturing trade is affected by its financial sector development and to investigate the role of institutions in this relationship. Countries endowed with better-developed financial systems tend to specialize in industries that rely on ex- ternal fi nance in production. This e ffect is likely to be stronger in countries with high-quality institutions. Using pure cross-sectional and panel speci fications on a sample of 75 countries over the period 1971-2010, we find that financial development strongly and robustly exerts a positive eff ect on manufacturing exports, even after controlling for the eff ect of banking crises. Furthermore, institutional quality is found to have a favorable eff ect on the extent to which finance influences manufacturing trade, suggesting a multiplicity of experiences of the largest exporters of manufactured goods

Développement financier et pauvreté dans l'UEMOA

La présente étude se propose d’évaluer les implications du développement du système financier sur la réduction de la pauvreté dans l’UEMOA et de mettre en évidence d’éventuels mécanismes de seuils dans la relation étudiée à partir d’analyses théoriques et empiriques. Les résultats obtenus à partir de données de panel pour un échantillon de sept pays de la Zone sur la période 1981-2005 montrent que l’approfondissement financier est un facteur réducteur de la pauvreté monétaire dans l’Union. Par ailleurs, la prise en compte dans l’échantillon d’autres pays en développement fait ressortir qu’il existe des mécanismes de seuil dans la relation entre approfondissement financier et pauvreté. Ces résultats sont robustes à l’introduction de variables de contrôle additionnelles. This study aims to assess both financial development effects for poverty reduction in the West African Economic and Monetary Union (WAEMU) and threshold effects evidence in financial development and poverty relation using theoretical and empirical analyses. The results obtained with panel data for a sample of WAEMU countries from 1981 through 2005 suggest that the poor benefit from the ability of banking system to facilitate credit allocation and provide saving opportunities. Moreover, with taking account of other developing countries in the sample, we find that financial deepening must get a certain level to be beneficial significantly to the reduction of poverty. These results are robust to additional control variables introduction. (Full text in french)

Financial Factors and Manufacturing Exports:Theory and Firm-level Evidence From Egypt

This paper focuses on the effects of financial factors on manufacturing firms' export participation. Using a simple dynamic discrete choice model, we first present the intuition according to which financial constraints reduce the probability of exporting. Then, based on a panel of Egyptian manufacturing firms over the 2003-2008 period, we estimate the impact of financial constraints on export market participation. Our main results show that, unlike financial liquidity, financial constraints reduce the export participation of Egyptian firms. In addition, financial constraints equally have a negative impact on alternative measures of the export activity, namely the export intensity and the time firm take before starting to expor

Social Protection for Poverty Reduction in Times of Crisis

The recent global crisis has highlighted the need to protect the poor and people vulnerable to adverse shocks. Many countries have implemented various programmes to protect social spending and help poor people during periods of financial crisis. This paper uses the most comprehensive database on social spending compiled thus far, and the unique cross-country database on poverty to explore the poverty-reducing role of social protection during financial crises. Using advanced panel data techniques to deal with endogeneity issues, we find that financial crises are associated with slower reductions in the poverty headcount and the poverty gap. Crises lead to 526,400-555,000 additional poor people and to an increase of 4.7-10.6 percentage points in the poverty gap in the medium to long term. These devastating effects of crises on poverty are relatively lower--by 11 and 20 percentage points for each percentage point increase in social spending for the poverty headcount and the poverty gap, respectively--in countries with higher social spending, suggesting the importance of social protection for poverty reduction in times of crisis and potential gains from policy intervention

Revisiting the countercyclicality of fiscal policy

This paper provides a novel dataset of time-varying measures on the degree of countercyclicality of fiscal policies for advanced and developing economies between 1980 and 2021. The use of time-varying measures of fiscal stabilization, with special attention to potential endogenity issues, overcomes the major limitation of previous studies and alllows the analysis to account for both country-specific as well as global factors. The paper also examines the key determinants of countercyclicality of fiscal policy with a focus on factors as severe crises, informality, financial development, and governance. Empirical results show that (i) fiscal policy tends to be more counter-cyclical during severe crises than typical recessions, especially for advanced economies; (ii) fiscal counter-cyclicality has increased over time for many economies over the last two decades; (iii) discretionary and automatic countercyclicality are both strong in advanced economies but acyclical (at times procyclical) in low-income countries, (iv) fiscal countercyclicality operates primarily through the expenditure channel, particularly for social benefits, (vi) better financial development, larger government size and stronger institutional quality are associated with larger countercyclical effects of fiscal policy. Our results are robust to various specifications and endogeneity checks.info:eu-repo/semantics/publishedVersio

How Do Banking Crises Affect Bilateral Exports?

This paper investigates whether banking crises are associated with declines in bilateral exports. We first develop a simple open economy model in which banking crises translate into negative liquidity shocks, leading to collapses in exports through supply-side and demand-side shocks. We then estimate a gravity model using a sample of developed and developing countries over the period 1988-2010. The results suggest that crisis-hit countries experience lower levels of bilateral exports, particularly in developing countries where supply-side shocks are found to be relatively more important than demand shocks. In developing countries, exports of manufactured goods are disproportionately hurt by banking crises and this negative effect is stronger in industries relying more on external finance. These findings are robust to correcting for potential endogeneity, to changes in the sample, and to alternative estimation methods

Financial Vulnerability and Export Dynamics

Etudes & documentsThis study documents the implications of financial vulnerability for export diversification in developing economies. Financial crises, by increasing the incidence of sunk costs of entry into exporting, reduce firm export dynamics. Financially-vulnerable exporters are not able to fully realize economies of scale in production and access better-sophisticated technologies. The number of products and destinations per exporter are therefore likely to decrease in times of crisis. We use a comprehensive cross-country dataset on export dynamics, with data covering the 1997-2011 period for 34 developing countries to investigate this issue. Building on the generalized difference-in-differences procedure proposed by Rajan & Zingales (1998) to remove any endogeneity bias, the results point to a negative and economically large effect of financial vulnerability on export diversification.Financial crises reduce export dynamics disproportionately more in financially dependent industries. This effect is less pronounced in countries with initially more open capital account, suggesting that portfolio inflows are good substitutes for underdeveloped domestic financial markets